$/ FOR FCC RECORD ONLY /$

$// MO&O, Cable Act of 1992, DA 94-1448//$
$/ 300.623 Regulation of Rates /$
$/ 1.106 Petitions for Reconsideration /$
$/ 76.906 Presumption of no effective competition /$
$/ 76.910 Franchising authority certification /$
$/ 76.911 Petition for reconsideration of certification /$

                               Before the
                    FEDERAL COMMUNICATIONS COMMISSION
                        Washington, D.C.   20554

In the Matter of:                    )     DA 94-1448
                                     )
C-TEC CABLE SYSTEMS OF               )
MICHIGAN, INC.                       )
                                     )
Petition for Reconsideration         )
                                     )
of Certification of                  )
Ashland Township, MI                 )
to Regulate Basic Cable Service Rates)
(MI1169)                             )
              
MEMORANDUM OPINION AND ORDER

Adopted:  December 12, 1994         Released:  December 13, 1994

By the Chief, Cable Services Bureau:

I.  INTRODUCTION

       1.     On November 1, 1993, C-TEC Cable Systems of Michigan, Inc. ("C-TEC")
filed a timely petition for reconsideration, challenging the certification of Ashland Township,
Michigan ("the Township") to regulate C-TEC's rates for basic cable service and associated
equipment.  On November 26, 1993, the Township of Ashland filed an opposition to C-
TEC's petition for reconsideration to which C-TEC then filed a reply on December 7, 1993. 
Pursuant to a recent Commission Order, C-TEC filed additional documentation in support of
its original petition.  Finally, C-TEC submitted a response dated November 30, 1994 to a
Bureau request dated November 25, 1994, asking for clarification on previously-filed
information.

       2.     Section 623(a)(4) of the Communications Act of 1934, as amended, allows
franchising authorities to become certified to regulate the basic cable service rates of cable
operators that are not subject to effective competition.  For purposes of the initial request
for certification, local franchising authorities may rely on the presumption that cable
operators within their jurisdiction are not subject to effective competition, unless they have
actual knowledge to the contrary.  Certification becomes effective 30 days from the date of
filing unless the Commission finds that the franchising authority does not meet the statutory
certification requirements.  Cable operators may file petitions for reconsideration of the
franchising authority's certification within 30 days from the date such certification becomes
effective.  Rate regulation is automatically stayed pending review of a timely-filed petition
for reconsideration alleging the presence of effective competition.  

II.  DISCUSSION

       3.     C-TEC asserts that its system is subject to effective competition because it
serves fewer than 30 percent of the households in Ashland Township, its franchise area. 
Specifically, C-TEC claims that it serves 43 of the 669 households within Ashland Township
or 6.4 percent of the total number of households.  As supporting documentation, C-TEC
provides 1990 Census data, which demonstrates that there are 669 occupied housing units
in Ashland Township.  In addition, C-TEC submits a computer-generated print-out with
sufficient subscriber information to support its claim that it serves 43 subscribers in the
franchise area.  Finally, C-TEC submits a declaration under penalty of perjury from a
responsible official certifying the accuracy of the data in the petition.    

       4.     In its opposition, the Township argues that C-TEC has made its service
available to only 108 homes in the franchise area.  Thus, the Township argues that C-TEC's
actual penetration level is 37.9629 percent when C-TEC's total number of subscribers is
compared to the number of homes where service is actually available.  Based on this, the
Township argues that C-TEC is not subject to effective competition in the franchise area, as
defined under our rules.  In reply, C-TEC contends that the Township's argument improperly
relies on a "homes passed" test in support of its claim that C-TEC is not subject to effective
competition.  Noting that the Commission has previously rejected the "homes passed" test,
C-TEC argues that the proper test for establishing effective competition is based on a count
of all households in the authorized franchise area (i.e., all of Ashland Township).  

       5.     As a preliminary matter, we are unpersuaded that the relevant franchise area
for purposes of determining the presence of effective competition in this case is some area
other than the entire Ashland Township.  The Township's argument is based on the number
of subscribers served by C-TEC in relation to the number of "homes" that C-TEC's cable
system passes.  The Commission, however, specifically rejected this test as a measuring of
determining the presence of effective competition.  As the Commission stated previously, 
generally, "[a] franchise area is the area a system operator is granted authority to serve in its
franchise."  As such, the correct measure for determining whether a cable system serves
fewer than 30 percent of the households in the franchise area is by comparing the number of
subscribers served by C-TEC's cable system in relation to the total number of households in
the franchise area.  

       6.     To the extent that the Township suggests that C-TEC has intentionally
redefined its franchise area to encompass only the 108 homes it currently passes, we find no
evidence to support such an assertion.  The Township provides no evidence that C-TEC has
redefined its franchise area.  The Township simply asserts that C-TEC passes only 108
"homes."  This assertion, in and of itself, is an insufficient basis upon which to find that a
cable operator has made an affirmative decision to restrict its service area.  As the
Commission has stated, "[t]he fact that a franchise area has not yet been filled out by the
construction of a system would not by itself be taken as redefining the service area."  As
the Township offers no other evidence that C-TEC has redefined its franchise area, we
conclude that the Township has not met its burden of proving that C-TEC has redefined its
franchise area.

       7.     In the absence of a demonstration to the contrary, cable systems are presumed
not to be subject to effective competition.  The cable operator bears the burden of rebutting
the presumption that effective competition does not exist with evidence that effective
competition, as defined by  76.905 of the Commission's rules, is present within the
franchise area.  C-TEC has met this burden.  C-TEC has appropriately relied on data
reflecting the number of households as required by our rules.  Relying on this data, C-TEC
has submitted sufficient evidence demonstrating that its cable system serves fewer than 30
percent of the households within its franchise area.  Thus, we find that C-TEC's system
serving Ashland Township is subject to effective competition.  Accordingly, its petition is
granted.

III.  ORDERING CLAUSES

       7.     Accordingly, IT IS ORDERED that the petition for reconsideration, filed by
C-TEC Cable Systems of Michigan, Inc. challenging the certification of Ashland Township
to regulate rates, IS GRANTED.

       8.     IT IS FURTHER ORDERED that the Certification of Ashland Township,
Michigan to regulate the basic cable service rates of C-TEC Cable Systems of Michigan,
Inc., IS RESCINDED.

       9.     This action is taken pursuant to delegated authority under  0.321 of the
Commission's rules, 47 C.F.R.  0.321.

              FEDERAL COMMUNICATIONS COMMISSION
       



              Meredith J. Jones
              Chief, Cable Services Bureau